The government is currently $7 trillion in debt, with considerable gaps in funding for essential programs like public transportation, education, environmental initiatives, homeland security, border control and defense spending. Tax rates are currently causing a number of companies to take employees and money over seas. Talks on expanding the government and creating new programs like national standardized testing, universal access healthcare, continued Social Security and a federal alternative-fuels program have stalled or failed due to a lack of money available for government use. The government must seek out ways to become more economically robust and fiscally sound. Raising taxes and cutting spending are options that might return the government to the status quo, but the burgeoning debt will limit the effectiveness of these options. Furthermore, both are unpopular views in America.
It is time that the government begins a concerted effort to make money and increase revenue. Although America has long practiced a free market style of capitalism, the government has to find ways to boost its budget. This can be done in a number of ways. The most non-intrusive is detailed here.
One way to make considerable sums of money would be through the issuing of Economic Development bonds. These bonds could be issued at a higher interest rate than traditional bonds, which coupled with an advertising campaign would make them sell rather quickly, especially as bonds are founded on faith in the government. All dollars raised through these bonds would go immediately into subsidies for targeted industries in both the private and public sectors. In five to ten years, these industries would begin to grow and pay greater amounts of tax revenue, meaning that the bonds would be payable to their owners and the government would still have a greater tax pool to make revenue from. In addition, wise targeting of industries to receive these bond dollars could mean a great boost to research into alternative fuels, security technologies and consumer goods, improving the quality of life for the American people. A national lottery would accomplish the same goals on a smaller scale and could be used as a supplement to new bonds.
Another way to increase revenue is by re-establishing the Bank of the United States. Although it has been defunct for about 180 years, a national bank has been found constitutional by the Supreme Court. By providing low-interest loans to businesses and entrepreneurs, the government could either grow its tax base or collect interest on overdue payments, if not both. This bank could also be chartered to provide loans to Americans looking to obtain higher education, job training, personal transportation, self-employment, health insurance or other factors that can increase productivity and tax revenue. Again, this simultaneously raises the standard of living for the population and equates to more sustainable, long-term tax revenues for the government. Furthermore, it does not equate to the government overstepping its constitutional boundaries.
Nationalization of industries or providers already receiving substantial government aid is a third way to increase funding. The government already spends millions of dollars on the transportation industry, particularly on commuter rail services and commuter airlines. To nationalize these service providers would not cost much for the government, as it already pays considerable subsidies to them. If the government assumed ownership of these bodies, it could then take profits for government funding. Any net revenue could go to the government, rather than to exorbitant personal salaries or other unnecessary expenses.
Along the lines of nationalization, government ownership of key industries like oil, steel, coal and ports could provide great amounts of money. Each industrial field could pay for a massive program, such as single-payer healthcare, national education standards, subsidized tuition at state universities and strict enforcement of border security. In addition, more federal money would be available for homeland security, making scanning of all cargo entering the country and screening of all airline passengers realistic programs.
Tariffs are a proven means of increasing revenue. By protecting domestic industries and placing taxes on imported goods, industry would be forced to maintain near-full employment. In addition, goods produced in America would be more likely to be used in America. This increases spending at home and protects American jobs, both of which increase federal revenue. Tariffs must be strategically implemented to protect weak or infant industries while more essential goods like medicine, food or clothing could be freely traded. To put tariffs on luxury and high-tech goods would help American industries compete with those abroad. To maximize the impact of tariffs, tariff revenue could be spent primarily on subsidies for the specific industries they protect.
The foreign aid system also has to be restructured. Fair trade and economic development loans or gifts are far more effective than simple governmental aid. Although humanitarian aid should be maintained or increased, giving discretionary money to foreign governments is not a wise policy. Providing grants for industries abroad, on the other hand, creates new markets to buy and sell goods with America. Consider the examples of the Marshall Plan, which provided substantial funding for economic development in Allied countries, versus the current foreign aid system, where money is largely given away to needy governments. The former successfully boosted the standards and qualities of living for free people while eventually paying America back through increased trade. The latter is largely wasteful and ineffective, as is evidenced by the defunct economies throughout African and Asian nations. Trade and aid have to be provided in a way that fosters economic independence and prosperity, rather than short-term political appeasement.
The government needs new sources of funding to carry out ambitious goals that the people want. With a balanced budget as a constitutional requirement, earmark transparency the law, public campaign financing and strict government ethics rules regarding lobbying and disclosure, the government could begin to explore new sources of revenue. The aforementioned checks must be implemented to ensure efficiency and fiscal integrity, but once the government is sound it could consider public enterprise and economic controls as a means of providing new services while cutting a number of taxes.
The rebirth of American public enterprise, implementation of checks on government irresponsibility and the subsequent increase in government revenues could be the solution to America’s most pressing problems.